IFF Leverages FHLBank Chicago Membership to Unlock $33.5+ Million in Funding for Affordable Housing in the Midwest November 20, 2023

In a Nutshell

What: Since 2011, IFF has sponsored 58 grant applications through the Federal Home Loan Bank of Chicago’s Affordable Housing Program that have provided developers in the Midwest with more than $33.5 million in gap funding.  
Sector: Housing 
Impact: Projects supported with IFF-sponsored AHP funds have created or preserved 2,760 housing units

As a member of the Federal Home Loan Bank (FHLBank) of Chicago, IFF has taken full advantage of the FHLBank’s Affordable Housing Program (AHP) by sponsoring 58 grant applications since 2011 that have resulted in more than $33.5 million in funding for developers in the Midwest. Combined, the projects supported with IFF-sponsored AHP funds have created or preserved 2,760 affordable housing units – helping to reduce the gap between the supply of affordable housing and existing demand in the Midwest.   

Launched in the wake of the Great Depression to stabilize the housing market, the FHLBank System is comprised of 11 regional FHLBanks that serve roughly 6,800 member institutions including banks, thrifts, credit unions, and insurance companies by providing them with a reliable, low-cost source of liquidity to support housing finance and community investment across the country. In 2010, Community Development Financial Institutions (CDFIs) were permitted to become members for the first time, offering organizations like IFF a critical new source of capital to deploy to support the development of quality affordable housing. That capital comes in the form of “advances” that function as flexible loans, and through AHP, which enables member institutions to apply for grants annually that are passed through to affordable housing developers to subsidize the cost of their projects.  

“Gaining access to FHLBank membership was an important milestone for the CDFI industry, and AHP has been an invaluable resource that we’ve leveraged time and time again to help mission-driven developers in the Midwest create high-quality, affordable housing in communities where it’s needed,” says Joe Neri, IFF’s CEO. “IFF is the largest CDFI sponsor of AHP applications within the FHLBank system, and one of the largest of all of FHLBank’s members, which is the result of being deeply embedded in Midwest communities and leveraging those relationships to increase the flow of capital through the program.”     

AHP grant awards are capped at $1 million per project, with the subsidy helping to bridge gaps in complex capital stacks that are constructed to ensure that housing projects can be completed while maintaining affordable rent levels for residents unable to pay market rate. This gap funding is especially important because not all projects have the capacity to take on permanent debt due to the way the project cash flows. For smaller, nonprofit developers, in particular, AHP funds offer an attractive solution to fill budget gaps and enable projects to proceed that might not otherwise be possible. So, too, is AHP a valuable resource when tax credits are being used to finance the development of affordable housing, which places additional pressure on developers to close financing on projects within set timeframes to avoid losing the tax credits.  

AHP has been an invaluable resource that we’ve leveraged time and time again to help mission-driven developers in the Midwest create high-quality, affordable housing in communities where it’s needed.”

“AHP subsidies provide support for affordable housing in partnership with our member institutions, community organizations, developers, public housing authorities, and tribal governments,” says FHLBank Chicago Community Investment Officer Katie Naftzger. “Since 1989, FHLBank Chicago has awarded more than $559 million in AHP subsidy grants. The Bank understands the challenges associated with affordable housing and supports CDFIs like IFF with providing the critical funding needed to help drive AHP projects in our communities.” 

One example of a project that benefited from an IFF-sponsored AHP grant is Torrence Place, a 48-unit permanent supportive housing development by Full Circle Communities that integrates health and housing with a ground floor community health clinic operated by Christian Community Health Center (CCHC). Torrence Place offers one- and two-bedroom accessible apartments for veterans and people with disabilities and is anchoring the revitalization of a busy commercial corridor in Lansing, IL. In addition to high-quality, supportive housing and on-site health care services, Torrence Place residents have access to a patio, community lounge, fitness center, business center, a secure package room, and supportive services from CCHC.  

To complete the $16.3 million project, Full Circle Communities relied on Low-Income Housing Tax Credits and Illinois Affordable Housing Tax Credits from the Illinois Housing Development Authority, funding from Cook County, the Housing Authority of Cook County, National Equity Fund, Bank of America, and ComEd, as well as a $1.7 million loan from IFF. Because of an AHP grant application sponsored by IFF, Full Circle Communities received a $720,000 subsidy from FHLBank Chicago that reduced the amount of cash the nonprofit developer had to bring to the table to complete the project. 

“For Torrence Place, receiving an AHP grant helped us close our financing gap,” says Lindsey Haines, Full Circle Communities’ senior vice president of real estate development. “Full Circle uses 75 percent of our developer fee and cash flow to fund supportive services for our residents. When we can access funds like AHP, we are better able to reserve that precious developer fee and cash flow to support our residents.” 

In the most recent AHP grant cycle, six housing projects received subsidies totaling more than $5.2 million. Collectively, the projects will create or preserve 372 affordable apartments for residents in Morris, Worth, Fairview Heights, and Urbana, IL, and in Milwaukee and Racine, WI. Read about each of the projects by expanding the sections below.  

Avalon at Morris

Domera Development
Morris, IL

Avalon at Morris will create 56 units of affordable housing on previously vacant landA mix of single-family, semi-attached, and apartment homes, the units will be affordable to residents earning 30, 50, and 60 percent or less of the Area Median Income. In-unit amenities will include window treatments; central heat/air; bulk storage space; Energy Star light fixtures and kitchen appliances; and washers/dryers in each unit. The project will also create a community center and a playground. Located in a well-established residential area, Avalon at Morris will provide residents with easy access to a multitude of public services and community amenities. 

Bronzeville Apartments

FIT Investment Group LLC
Milwaukee, WI

Bronzeville Apartments will be a mixed-use development, pairing quality mixed-income multifamily housing with a creative-industry incubator. The project will create 48 one-, two-, and three-bedroom apartments affordable to residents earning 30, 50, and 60 percent or less of the Area Median Income, as well as 12 market rate units. Beyond housing, the project will include a community service facility operated by Beyond STEM Inc, a nonprofit organization that provides high-quality, accessible, engineering, and tech-forward STEM and arts programming for students and a separate 21,400-square-foot facility that will serve as a creative arts and technology hub for creative entrepreneurs and businesses (this portion of the project is being financed separately). Three of the apartments will be flexible live-work units marketed to creatives, connecting the housing portion of the development to the creative ecosystem of the surrounding community. The development will include a number of sustainability features, including solar panel electric generation capacity and stormwater recirculation features.  

Garden Apartments

Garden Center Services
Worth, IL

Garden Apartments will repurpose an unused parking lot to create a 16-unit permanent supportive housing development providing adults with disabilities with quality rental housing. The building will have 12 one-bedroom units and four two-bedroom units, community space, laundry, storage, gardens and an outdoor patio, as well as small offices for program and service delivery.  

Harbor at State and Main II

Gorman & Company
Racine, WI

Harbor at State and Main II will preserve 84 apartments, including 32 one-bedroom units and 52 two-bedroom units that are affordable to senior households earning less than 60 percent of the Area Median Income. The Housing Authority of Racine County is committing 21 project-based vouchers to the development, ensuring that 21 of the apartments will be reserved for households earning less than 30 percent of the Area Median Income that are experiencing homelessness or have in the past.   

North Bend Residences

Fairview Heights, IL

North Bend Residences will be a senior community comprised of attached duplexes and triplexes that include 60 affordable units. The project will be developed using a prefabricated framing system incorporating engineering and environmental standards intended to achieve green certification. The homes will feature one and two bedrooms with energy star-rated appliances. All homes will have broadband internet infrastructure and accessible bathrooms and single-car attached garages. In addition to affordable housing for residents ages 62 and up, the project will include management offices, a fitness center, a media center, and club room.  

Steer Place Apartments

Oak Grove Development Corporation (nonprofit subsidiary of Housing Authority of Champaign County)
Urbana, IL

Oak Grove Development Corporation, a 501(c)(3) subsidiary of the Housing Authority of Champaign County, will rehab a 108-unit multifamily apartment complex – Steer Place Apartments – that includes 107 one-bedroom units and one two-bedroom unit for residents ages 55 and up. With all units supported by project-based vouchers, no tenant pays more than 30 percent of their income for rent. The rehab will include upgrades to the kitchens, bathrooms, living rooms, and bedrooms – such as new kitchen cabinets and counter tops; redesign of the kitchen floor plans; new plumbing fixtures, including the replacement of the original tile shower surrounds; new light fixtures to improve energy efficiency; and mechanical design changes to improve air flow within the unit. The project also includes upgrades to the building’s elevators, new finishes in all common areas, and the buildout of unused spaces in the facility to provide new amenities for residents. 

To learn more about the AHP grant process, contact IFF’s affordable housing lending team

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